Last Updated on October 23, 2025
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Over-the-counter (OTC) tax deeds provide a way for beginner investors to enter real estate without competing in a tax auction. A tax deed is a property sold by a county when owners fail to pay their property taxes. If a property doesn’t sell at auction, it stays in the county’s inventory and can later be purchased “over the counter”. Because these properties have already been passed over, counties often offer them at a set price based on the unpaid taxes, which can be far below market value.
What Are OTC Tax Deeds?
- Leftover properties: Counties hold tax deed auctions to get back unpaid taxes. When a property does not attract any bidders, it is added to an OTC list and can be bought directly from the county. In essence, OTC lists are like the “clearance rack” for real estate.
- Fixed price, no bidding: Unlike auctions, you simply pay the county the unpaid taxes and fees. You do not compete with other bidders, which helps keep prices low.
- Potentially large discounts: Some OTC properties sell for pennies on the dollar. The video notes examples with assessed values far above the purchase price, such as a lot assessed at $78,000 for an $7,200 sale amount or a building with a $165,000 value for $19,000. These spreads can be attractive but require research to verify the condition and title.
- More risk: Properties remain unsold for a reason. They may have structural problems, title issues or land‑use restrictions. Investors must research thoroughly to avoid costly surprises.
Video Recap – Beginner Steps
In the video, we demonstrate how to find and analyze OTC tax deeds. Here is the step‑by‑step process:
- Use a trusted website: The presenters recommend visiting taxleanschool.com and clicking on the “Knowledge Vault” > “Guides” > “OTC” section. This resource lists counties offering OTC properties and provides links to official county pages.
- Choose a state and county: They highlight Cecil County, Maryland and counties in Mississippi. Each county page shows sale amounts, assessed values and property addresses. Look for a large difference between the sale amount and assessed value; a smaller sale amount relative to assessed value suggests potential savings.
- Perform due diligence: Use free tools like Regrid or county property search to verify parcel numbers, property size, zoning, and whether there is a structure on the land. The video explains how a missing prefix (e.g., adding “08” to a parcel number) allowed them to locate a property on Regrid. They also cross‑check addresses on sites like PropWire or Zillow to verify whether a building exists and estimate market value.
- Understand property condition: A “zero” address or lot number typically indicates vacant land; an address with a street number may be a building. A lower sale amount does not guarantee a bargain; some properties are landlocked or require costly rehabilitation. Always visit or use street‑view tools to assess the condition.
- Call the county: The presenters encourage viewers to pick up the phone. Ask the tax collector when the next sale is and what happened to unsold properties. Counties can email or mail OTC lists upon request. Hard‑to‑find lists are often more rewarding because fewer investors know about them.
- Check redemption rules and obligations: Some states have redemption periods, meaning previous owners can reclaim the property if they repay taxes within a specified time. Certain counties require buyers to rehabilitate dilapidated buildings within a set period. Know these rules before purchasing.
How to Find OTC Tax Deeds – A Step‑by‑Step Guide
The video’s process mirrors general best practices. Use the checklist below to locate and evaluate OTC opportunities:
Below is a simple table that summarises the steps to find and buy an OTC tax deed. Keep this handy as you work through each stage.
| Step | What to do |
| Identify your area | Pick a state or county known for selling OTC tax deeds. |
| Check county resources | Look on the tax collector’s or treasurer’s website for “over‑the‑counter,” “surplus,” or “tax forfeited” lists. |
| Contact officials | If you cannot find a list online, call or email the office. Ask about OTC lists, redemption periods and deed types. |
| Research the property | Compare assessed value, market value and condition. Use mapping tools to verify parcel numbers and look for liens, environmental issues or demolition orders. |
| Count all costs | Add back taxes, legal fees for clearing the title and any repairs you will need to make. |
| Complete the purchase | When you are ready, follow the county’s instructions to pay the unpaid taxes and transfer the deed. Some counties accept payment online, others require a cashier’s check or in‑person visit. |
Difference Between Tax Deeds and Tax Liens
It is easy to mix up tax deeds and tax liens. A tax lien is a claim against a property for unpaid taxes; the investor pays those taxes and earns interest if the owner repays them. A tax deed, however, transfers ownership of the property after any redemption period. When you buy an OTC tax deed, you are purchasing a property that did not sell at auction, and once the redemption period is over, you can own or resell it. With a tax lien, you only earn interest and might not get the property at all.
Tips for OTC Tax Deeds Beginners
- Do not skip research:
Many investors avoid OTC properties because of hidden problems, such as cracked foundations or title issues. Thorough due diligence is essential; hire a title company if needed and verify local code requirements.
- Understand redemption periods:
States have different rules on how long former owners have to reclaim property. In some states, you must wait months or even years before selling or improving the property.
- Look for undervalued lots, but verify use:
The video shows vacant lots with addresses like “0 Cheryl Drive.” Vacant land can be a great entry‑level investment, but some lots are landlocked or lack utilities. Contact the planning department for zoning and access information.
- Budget realistically:
Don’t overbid or buy more than you can afford. Factor in legal fees and the cost of clearing title. If required to rehabilitate a property within a certain timeframe, include repair costs.
- Network and learn:
Join local real estate investor groups or online forums. Many counties host monthly auctions where you can practice bidding and learn from others. Dustin’s video encourages beginners to attend multiple auctions; even if you don’t buy right away, you’ll gain experience.
Frequently Asked Questions
A regular tax deed is sold at auction and may attract competitive bidding. An OTC tax deed is a property that didn’t sell at auction; you purchase it directly from the county, usually by paying the unpaid taxes.
Start by choosing a state and county. Check the tax collector or treasurer’s website for “over‑the‑counter,” “surplus,” or “tax forfeited” listings. If you can’t find a list, call the office and request it. Private databases and educational sites like Tax Sale Resources also aggregate lists for a fee.
Yes. Unsold properties may have severe defects or title problems. Always conduct due diligence, verify redemption periods and budget for repairs. Consider working with a real estate attorney, especially if you’re new.
Potentially. If you buy a property far below market value and there are no serious issues, you could resell or rent it for a profit. Some investors prefer vacant lots because they require less maintenance and taxes. However, there are no guarantees; treat OTC investing as a long‑term strategy, not a get‑rich‑quick scheme.
Final Thoughts
OTC tax deeds offer a way for beginners to step into real estate investing with relatively low capital. Dustin Hahn’s video demonstrates that opportunities exist — from small lots in Maryland and Mississippi to larger parcels that didn’t sell at auction. The key is not to get caught in endless research. Start small, follow the due diligence steps, and learn from each experience. With persistence and caution, OTC Tax Deeds beginner investors can find hidden gems while supporting counties by paying overdue taxes.
